Wells – Page 7 – Glastonbury Property News

For the buy-to-let investor the yield or the amount of rent received as a percentage of the capital invested in the property is the all-important statistic to focus on. However, we cannot ignore capital growth which is the ‘icing on the cake’ especially as high yields are sometimes hard to achieve.

I was scanning through the latest price paid data published by the Land Registry when a client popped into the office and asked the question which parts of central Somerset have seen the greatest capital growth in recent years?

Looking back over the last 10 years, the area that stands out overall is Frome where the price paid for property is now 25.88% higher than it was 10 years ago. It is not surprising when you consider Frome was not so long ago voted one of the best towns in the UK to live, according to the Sunday Times.

There has always been an undercurrent of resilience and progression in Frome – vintage shops before they became the trend, a green movement, a vibrant arts scene. But it is increasingly surpassing itself. Not only does Frome have the market, which is to the west country what Brick Lane is to London, it has a booming cafe and food culture, pubs have been reopening, independent shops arrive and stay and what were once crumbling old beautiful buildings are now creative arts hubs. Featured recently on Countryfile, Frome really could become the market town of the future.

Of particular note in Frome is the capital growth of flats that have risen nearly 40% in 10 years while terraced properties have also fared well rising 35% over the same period.

Heading West to Street property prices have done well here too where buyers today pay over 20% more for property than they did 10 years ago. Of particular note are detached properties that are now selling on average for 28.4% more than they did 10 years ago while terraced properties now sell for 26.12% more over the same period. Street has seen many changes in the last 10 years and as well as being the home of C&J Clark International and Millfield School is a vibrant and fast-growing village.

The Best of the Rest

Elsewhere, terraced properties in Wells are now 24.14% more expensive than they were 10 years ago while detached properties in Glastonbury have risen over 23% in the same period.

Whilst my analysis is limited to averages and past performance is no guide to future performance it does give a general indication of what areas and property types may be on the up in terms of capital growth.

A Look at Postcodes

A more detailed and meaningful analysis of the Land Registry data is limited by the volume of transactions recorded but a look at postal sectors provides further insight to those areas with the highest capital growth:

BA2 7 – Farleigh Hungerford, Woolverton and Norton St Philip areas of Bath – rise of 95.77% in 10 years
BA11 5 – Ellworthy Court, New Road, Southfields in Frome – risen 56.78% in 10 years
BA6 8 – Baltonsborough, Butleigh and in Glastonbury the areas South of the A361 and East of Wells Road have seen a rise in average price of 36.95% in 10 years

Property experts will tell you that the growth prospects of a property can vary by property type and even what end of a street the property is on so local expertise is vital when choosing an investment property.

About Tom Morgan

Founder of Jungle Property the multi award-winning letting agent based in Glastonbury, Somerset. I am passionate about property and Glastonbury and about providing the very best advice to anyone who wants the best return on a buy-to-let property investment. For an open and brutally honest opinion on anything in the Glastonbury property market please contact me via tom.morgan@jungleproperty.co.uk

What does Brexit mean for the housing market in central Somerset?

The debate over the effects of Brexit very often focuses on London with some commentators predicting London would have a lower standing in the global markets meaning less people would be employed in London and working for less wages.

London will always be a big attraction to foreign buyers who love the political and economic stability and the rich cultural life. I do not believe any of this is threatened by Brexit.

With much of the housing industry supported by workers from outside the UK, some argue that a vote to leave could have a negative impact on the supply of skills to the housing industry directly and indirectly through less appealing exchange rates. This would slow the building of new homes creating upward pressure on prices.

In the run-up to the referendum some elements of the housing market may be subdued as fear of the unknown takes hold. Research has shown that transactions slow ahead of a general election, to be followed by a price spike at the time of the vote and in the following six months. With the short-term uncertainty in the country, big decisions are put on hold and people are less likely to make big-money purchases such as buying a property in central Somerset.

Away from Brussels and far from London how will the 46,157 households in central Somerset be affected by Brexit?

In the six months up to last year’s general election, the average price paid for property in central Somerset dropped by 3.6% compared to the previous six months. The number of transactions in the six months after the election jumped by just over 30% compared to the six months up to the election with a rise in the average price paid of 1.3%. Accepted there may be a seasonal element to these statistics but it does tend to support research on a wider scale.

Now in the run-up to the referendum, I predict that the ‘in’ camp will start to scare homeowners with forecasts of negative equity, while the ‘out’ camp will appeal to the 20-somethings, who’ve been priced out of the property market with the prospect of a new era of inexpensive housing, should the fears of those London estate agents, who believe the bottom will fall out of the market if we do leave, become real.

The principal menace to the central Somerset (and the UK as a whole) housing market could be an increase in interest rates as a result of Brexit, which could theoretically see the cost of mortgages grow swiftly, pricing many out of the market.

For the majority of central Somerset landlords who buy without a mortgage, this won’t affect them. Also, according to the Bank of England, 80.33% of all new mortgages taken out in 2015 were fixed rate. Looking at all mortgages as a whole, according to the Bank of England, 44% of all UK mortgagees have a fixed rate mortgage, but 56% don’t, so if you aren’t on a fixed rate talk to your mortgage broker now – because they can only go in one direction. Upwards.

Whatever decision is made by the electorate of central Somerset and the UK as a whole, over the long-term it won’t have a major effect on the central Somerset property market.

We have seen off the credit crunch of 2008/9 and subsequent property crash, the 1988 Nigel Lawson induced post dual-MIRAS property crash, the 1979 Winter of Discontent property crash, the 1974 oil crisis that stimulated another property crash.

Somerset is the home of Cheddar cheese, cider, the world’s largest festival of performing arts, 11,500 listed buildings and the Wurzels all wrapped up in beautiful coastline and countryside so will always be an attractive destination for those who want to escape to the country. Property prices in the Mendip district are now 28% higher than they were 10 years ago.

A referendum on Britain’s continued membership of the European Union seems far removed from the housing market in central Somerset and whether or not an individual decides to buy or sell. Whether someone wants to move house or not is not going to be influenced by the outcome of the referendum.

Summary

I see little impact on the housing market in central Somerset as any anxiety leading up to the referendum and any Brexit uncertainty would be short-lived, or merely a headwind – whether we want to move house or not makes no difference if we are in or out of Europe.

Come 23rd of June, whatever the result, there might be some short-term volatility in the property market, but in the long-term (and property investment is a long-term strategy) there aren’t enough houses in central Somerset to live in – and that includes either to buy or to rent. Until the UK government solves the problem of not enough new houses being built, the central Somerset property market will be just fine.

Happy voting!

Category: Wells Page 7 of 15

Which parts of central Somerset have the highest growth in property prices?

About Tom Morgan

What does Brexit mean for the housing market in central Somerset?

About Tom Morgan

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